DML was established in 1987 to run Devonport Royal Dockyard, which it then acquired in 1997. It offers design, build and support solutions across the defence and commercial sectors, including nuclear submarine refit, refuelling and maintenance.

‘Devonport Management has been a very good investment for Balfour Beatty and we are pleased to have played a part in the success of the enterprise,’ said Balfour Beatty Chief Executive, Ian Tyler.

‘However, long-term involvement in DML is not core to our strategy and a sale on the terms agreed represents excellent value for our shareholders. This sale places the combined Babcock and DML businesses in a primary position to achieve consolidation of UK submarine assets,’ added Tyler.

The other shareholders in DML, who are also selling their interests to Babcock, are KBR (51%) and the Weir Group (24.5%). The transaction is conditional upon the approval of the Ministry of Defence and the shareholders of Babcock. It is anticipated that the transaction will be completed within approximately 60 days.